This study has two main objectives: (a) toexamine the relative impacts of positive and negative word of mouth (PWOM andnWOM) on the shift in the receiver’s brand purchase probability; and (b) toanalyze the effect, direct or indirect, of a number of interpersonal andnon-interpersonal factors on the relation between PWOM or nWOM and the shift inthe receiver’s purchase probability. The data were collected from a sample of1,035 consumers in four product/service categories. The results suggest thatfirms should develop a proactive management of WOM communications that takesinto account aspects of both the sender and receiver.

DISCuSSION AND CONCLuSIONS

WOM long has been recognized as a powerfulforce affecting consumers’ attitude and choice. The results of the current studyenhance current understanding of how WOM influences the receiver’s choice. Thisarticle, unlike previous studies, represents an attempt to explicitly test the differentialimpact of positive and negative WOM on the mean shift in the brandpurchase probability.Furthermore, this work differs from most earlier studies on WOM in that the authorsinvestigated various brands in a range of categories of products (mobile phonesand laptops) and services (mobilephone companies and travel agencies). Fromthis perspective, this study makes various contributions to the literature onWOM communications in marketing.

Specifically:

• The empirical analysis shows that positive(negative) WOM has a positive

(negative) impact on the shift in the receiver’sbrand-purchase probability. The results also show that positive WOM has astronger impact on brandpurchase probability than negative WOM.

An explanation for positive WOM’s strongereffect in this study is that the prior purchase probability tends to be below 5on a 10-point scale. In particular, the prior purchase probability is 4.2984 forthe positive WOM subsample and 4.4721 for the negative WOM subsample. Thissituation leaves more room for change in response to positive WOM than inresponse to negative WOM.

Thus, the results suggest that negative WOMis less diagnostic than positive WOM. There is a “positivity effect” (using Fiske’sgap explanation), with positive WOM having more impact than negative WOM.

• The results also show that the same interpersonalfactors govern the impact of both positive and negative WOM on the shift in thereceiver’s brandpurchase probability. The authors can conclude that the sender’sstrength of expression has the greatest influence for both positive andnegative WOM, followed by how actively WOM is sought.The findings of this studysuggest that when the sender’s strength of expression is high and when WOM(positive or negative) is actively sought, WOM will have a significantinfluence (positive or negative) on the shift in the receiver’s brand-purchaseprobability.Thus, marketing strategies designed to promote interpersonalcommunication will reach more senders/receivers and be more efficient if theyare directed at senders with strength of expression and receivers who aremotivated to seek information through WOM.Firms also should pay particular attentionto the potential influence of negative WOM, as these communications reduce thepurchase probability. Consequently, companies should also adopt decisions aboutmarketing strategies directed at senders and receivers with the objective ofminimizing the sending of negative WOM and/or the effects of exposure tonegative communications of people motivated to seek advice actively.

Nevertheless, the effect of both interpersonalfactors on the receiver’s decision is stronger when the WOM information ispositive (positive WOM) than when it is negative (negative WOM).The currentfindings support the hypothesis that level of receiver’s loyalty (a non-interpersonalfactor) reduces the impact of both positive and negative WOM on the shift inthe receiver’s purchase probability. Thus, the effect of WOM (positive ornegative) is conditioned by the receiver’s previous loyalty.

As the receiver’s level of loyalty toward abrand increases, positive and negative WOM about that brand will have lessimpact on the shift in the future purchase probability. Looking at the plots inFigure 4, positive messages (positive WOM) clearly have more impact when thereceiver’s pre-WOM loyalty is from 0 to 6, whereas negative messages (negativeWOM) have more influence in the range 4 to 7 (See Figure 4).Thus, the potentialimpact of WOM (positive or negative) can be estimated for any segment ofconsumers if the mean pro-WOM loyalty can be assessed using purchase records ormanagement judgment, for example.

• Various factors directly influence how activelyWOM is sought and indirectly affect the shift in the receiver’s purchase

probability.Thecurrent findings indicate that, when senders are perceived as knowledgeable,the receivers are motivated to actively seek information (positive or negativeWOM) from them. Thus, a significant positive relation exists between the twoconstructs.Likewise, when the tie between senders and receivers is strong, thereceivers are motivated to actively seek positive WOM information (empiricalevidence for negative WOM was not found).

Conversely, the receiver’s experience wasalso found to be a significant indicator of how actively WOM is sought. Themore knowledgeable people are or the more experience they possess, the less intensewill be the active search for information (positive or negative WOM).

Furthermore, the greater the receiver’sexperience, the less risk they will perceive in the purchase; and the greater theperceived risk, the more active the search for WOM information (positive ornegative WOM).

• For both positive and negative WOM, the receiver’sperceived risk has the strongest positive effect, followed by the receiver’sexperience (negative effect), sender’s experience (positive) and, to a lesser extent,strength of tie between sender and receiver (positive influence only forpositive WOM).

The practical implication of theseempirical results is that companies should pay particular attention to theconsumers who are most motivated to seek advice actively (less experiencedconsumers who perceive more risk in the purchase) to maximize their exposure topositive communications from senders perceived as knowledgeable and with whomthey have strong ties and minimize their exposure to negative communicationsfrom senders perceived as experts.